Starting an ecommerce business is no easy task. From setting up your website to streamlining your supply chain, it seems there are hundreds of things to consider in the early days. And truthfully, there are.
But that’s not to say this always-on pace should continue forever. With the right strategies in place during launch, it should be much simpler to navigate the changing world of ecommerce in the future. In fact, the more you build up your strategies today, the more efficiently your business will run tomorrow.
The difference between success and failure in the industry has a lot to do with your ecommerce strategy. Prepare your brand for a successful launch by learning more about ecommerce strategies, what they can do, and how to design one of your own.
What are ecommerce strategies?
Ecommerce strategies are interconnected plans that drive your business operations. There are three major ecommerce strategies to consider: product strategy, customer relationships, and corporate considerations. Each of these must work together to ensure the best possible outcomes for your brand.
Let’s explore these three major ecommerce strategies and their structure in greater detail.
Product strategy comprises inventory management and development. It requires you to take a bird’s-eye view of some major processes, including:
- Development research. Who is in charge of the research portion of your products? Will it be primarily accomplished in-house or by a third-party organization?
- Product orientation. What kind of people want to buy your products, and how are they perceived in the marketplace? You may want to rely on a two-by-two matrix or a SWOT analysis to navigate the planning process better.
- Inventory supply chain. How do you plan on getting products, and how viable will this approach be in the future? Is there enough flexibility in the structure to account for shortages?
- Line of products. Consider the entire width and breadth of your product line. How much do you want to offer? Are you planning on multiple varieties with customization options (i.e., t-shirts with different logos) or just multiple lines of related products (t-shirts, shorts, etc.)?
- Product viability. Are your products evergreen, meaning they remain relevant all year long? Or are they going to be seasonal? Perhaps you’ll want a mix of both to increase sales during different events or holiday seasons.
Building a strategy for managing customers is imperative for tracking the lifecycle of the buyer’s journey. There are many important things to consider along the way, including:
- Target market. Who is the audience your brand is trying to reach? You may want to create user personas detailing your customers’ specifics, including their demographics, ages, income, and psychographics.
- Company branding. How do you want to present yourself to customers? Think through all elements of this, including your company logo, brand voice, and business name.
- Sales channels. How do you plan on accomplishing the customer acquisition process? Social media? Emails? Webinars?
- CX and UX. Consider the impact of your customer experience and user experience. Do you have everything in place to wow your buyers, including great customer service and an accessible website?
- Customer retention. Is there a specific frequency at which customers should order from your company? How will this impact your sales and profit margins in the future?
While you may not feel your ecommerce company is large enough to worry about corporate relations, the fact is that every brand needs a detailed process for communicating with business entities. This strategy should consider:
- Shareholders. If your brand decides to go public, how will you manage your shareholder relations? How many investors do you want, and how will you communicate with them? Additionally, do you have a way to repay stakeholders over time?
- Financing. How much capital does your business need to get started—and how much will it need to grow over time? Will you have an established credit line with a bank, or will you tap into alternative sources like Shopify Capital?
- HR. If you have at least one employee at your business, you’ll also need a solid HR strategy. How will employees get their benefits, and what benefits should they include? Can they ask for PTO, and what will be the procedure for this? Will you require documented processes for hiring, firing, and promotions?
Creating a winning ecommerce strategy
As you can see, the questions involved in developing an ecommerce strategy can be overwhelming at best. However, they are absolutely critical for ensuring your approach (and resulting strategy) is airtight.
Thankfully, asking all these questions won’t make your plans overly complicated. Ecommerce strategies are interconnected at a basic level, making it easy to approach each vertical using a similar framework.
This framework can be broken down into four steps: personal values, target markets, goals and visions, and prioritization.
Here’s how to create a holistic ecommerce strategy using each of the four.
1. Choose your personal values
A well-thought-out strategy is perhaps the most important element of ecommerce success—but it can’t be done well without the compass of your personal values.
The vast majority of your ecommerce strategies should be sculpted by what you believe in. Ask yourself: what do I want to achieve, and why? How will this impact how my business is operated or make money in the long run?
Let’s look at an example. You believe in giving back to the community. Therefore, you want all of your materials to be locally sourced, meaning you only partner with neighborhood brands. Because of this, shipping may take longer—so you provide customers with additional education and resources. Your price point must be higher to offset the premium you’re paying for content and local partnerships, directly affecting your subscription model.
As you can see, realizing your personal values will help you make better decisions regarding day-to-day business operations.
2. Familiarize yourself with the target market
If you haven’t already, start getting to know the audience you’re selling products to. This involves conducting research that evaluates who they are, what they believe, and why they prefer your brand. Remember that the more defined your target market is, the easier you can make efficient decisions regarding your customer journey.
Apart from generalized market research, it may be a good idea to perform surveys or run small focus groups. These allow you to ask intimate questions about the efficacy of your brand, including how customers feel about certain changes, sales channels, or even packaging decisions.
3. Develop long-term goals and visions
Once you have the bones of your ecommerce strategy together, it will be time to develop a far-sighted plan for growth and development.
You don’t have to be a master orator or a wordsmith to build a solid vision statement. Just start with the basics:
- Where do you see your business, brand, or product five, 10, or 20 years from now?
- What needs to happen to take your goal from pipe dream to reality?
- What KPIs do you need to measure success? Define your key results.
If you need additional KPI ideas, try starting with customer acquisition costs, customer lifetime value, and revenue growth rate. As you expand, you may want to key into more specific metrics, such as churn or retention rates.
Don’t forget to map your vision statements to the SMART goal framework (specific, measurable, achievable, relevant, timely). For example, you might want to offer five new product lines that complement your major USP within the next 10 years.
4. Build a prioritization timeline
With so many goals whirling about at once, getting started on a strategy may feel like a monumental undertaking. To start without feeling overwhelmed, it’s imperative to categorize your goals from most important to least important.
There’s no right or wrong way to accomplish the prioritizing process. However, you may want to evaluate your goals from an objective standpoint. Which one should be completed first to assist all other goals? If possible, try looking at things from a problem-first perspective. Determine your biggest pain point, then work on goals that directly address it.
Getting back to the drawing board
The best ecommerce strategy is one that continues to evolve as your business does. As you grow, don’t be afraid to rework older strategies to create the most positive outcomes for your business. Update older mission statements that don’t currently align with your brand, and cut out subpar goals to replace them with even better ones.
As you continue refining your planning and development phases, remember that today’s most efficient businesses are unafraid of strategy changes.